Parks Associates Blog

Monday, March 23, 2009

CBS Increases Mobile Value-Proposition - Will They Score or Draw a Foul?

NCAA March Madness is underway, and while I’m not a sports fan, I am interested in digital media strategies of traditional media companies particularly from an ad-focused research perspective. And it looks like CBS is making a play for mobile.

In partnership with Apple, CBS has created an iPhone application featuring mobile video streams of NCAA March Madness basketball games. While AT&T and Verizon mobile customers have access to the March Madness games via a $15 per month mobile TV subscription, this sports app is affordable and includes interactive features and capabilities (however, one must have a WI-FI connection to receive video). For example, the app provides game statistics as a transparent overlay of the video.

CBS’ mobile value-proposition is two-folded:
  • Consumers get on-the-go access to March Madness basketball updates and games (albeit at a price - $4.99 per mobile application).
  • Advertisers/brands receive free cross-platform ad exposure within the app.

CBS is providing free ad space, as a bonus offering, within the application to current NCAA March Madness advertisers on broadcast TV. One can safely bet CBS will charge advertisers for the space in the future especially if the app is a hit among iPhone owners.

Taking advantage of dual-revenue stream models is an increasingly popular business strategy for mobile content publishers/providers. First, get consumers to pay for the content (or charge distribution fees) and then supplement the content with advertising. The arrangement has already been accepted by consumers when considering cable TV, so why not employ the same strategy on the mobile channel?

To date, CBS has been committed to the enhancement and monetization of consumer experiences across digital media platforms. CBS’ NCAA iPhone application is just another example of these efforts as the network provides access to March Madness on broadcast TV, online, and now, mobile. Kurt Scherf posted a blog regarding the recent CBS online video offering, NCAA March Madness On Demand.

When considering CBS’ current mobile media strategy and its true value-proposition, the following questions must be answered.

  • How many mobile consumers paid for this application? How many engaged and used the application?
  • Is current ad exposure via the mobile app significant enough to justify future media spend by advertisers? (I assume this application appeals to a relatively small group of avid college basketball fans.)
  • Moving forward, will advertisers insist mobile ads be offered as a value-added offering to complement their existing broadcast NCAA March Madness buys - especially now that they’ve received the app-ads for free?
Even if the app is downloaded by only a few thousand mobile users, I’d say, “CBS scored with their NCAA March Madness app!” Why? Because the network is hustling after the consumer while making key digital media plays – ones that will hopefully increase CBS' out-of-home audience ratings and brand affinity for advertisers.

Note: To date, the App Store has received 900 reviews of the application. The application has a 3 (of 5) star rating.

UPDATE: Per MediaPost on 3/24/09, the CBS NCAA iPhone app is the second-most-popular paid program in Apple's App Store. In addition, in the first four days of coverage, NCAA March Madness via CBS' on-demand digital service attracted 5.6 million unique visitors, a 60% increase year to year.

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